Searching for the Concentration-Price Effect in the German Movie Theater Industry
AbstractThe empirical relationship between market concentration and prices has been well established for a long time and for numerous industries. Recently itwas confirmed for the USmovie theater industry. This paper investigates, whether such a price-concentration relationship can be found on local cinema markets in Germany as well, focusing on up-to-date mainstream movies. First, we develop a model of monopolistic pricing and estimate its parameters using data of monopoly markets from a new set of German micro data. Then we apply the estimated model to simulate monopoly prices on local markets with two or more operators and compare them to the prices actually observed in these markets. We find no significant difference in admission prices, which puts our study in contrast to the results found on local US markets. Searching for an explanation, we test whether movie theater operators even though being located in the same geographic area, are local monopolists, but find no hint of that, either.
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Bibliographic InfoArticle provided by Justus-Liebig University Giessen, Department of Statistics and Economics in its journal Journal of Economics and Statistics.
Volume (Year): 231 (2011)
Issue (Month): 4 (August)
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Price-concentration study; cinema pricing;
Other versions of this item:
- Böhme, Enrico & Müller, Christopher, 2009. "Searching for the Concentration-Price Effect in the German Movie Theater Industry," MPRA Paper 15315, University Library of Munich, Germany.
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
- R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Production Analysis, and Firm Location - - - Other Production and Pricing Analysis
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